Office: 165 Pretoria Avenue, Ottawa ON. K1S 1X1

Phone: 613.238.2801

Fax: 613.238.4583

email: roberthof@royallepage.ca

royal lepage

Blog

Archive for June, 2020

Can dead people sign property deeds?

The answer: it depends who you ask about so-called “zombie deeds.”

In legal circles, a deed of land signed during the owner’s lifetime but registered after death is known as a zombie deed.

Judging by online comments in legal blogs, a significant number of real estate lawyers — myself included — would answer yes. This position is based on the 2015 ruling of Ontario Superior Court Justice Laurence Pattillo in the case of Winarski v. Sproul.

But the answer is no if you ask Jeff Lem, Ontario’s highly-respected director of titles, as well as Superior Court Justice Helen MacLeod-Beliveau in her March 2020 ruling in the Thompson v. Elliott estate case.

In the Winarski case, Ms. Sproul signed a deed to her Toronto property and gave it to her lawyer to register. Due to a minor title problem, the lawyer never registered it. Justice Pattillo ruled that the deed was valid to transfer ownership of the home out of Sproul’s estate.

In the Thompson case, Mrs. Elliott and her husband Mr. Thompson jointly owned a home in Ont. Ownership would go to the surviving spouse. Shortly before she died, Elliott signed a deed of land to split the joint ownership so that her half of the house would go to her adult children on her death, instead of her spouse.

When Elliott died three weeks later, her lawyer realized he had forgotten to register the deed, and proceeded to register it, despite the fact that she was deceased.

Justice MacLeod-Beliveau ruled that the post-mortem deed was invalid. She was highly critical of the lawyer who registered it.

The judge also referred to the administrative policy of Ontario’s director of titles, which is opposed to the registration of deeds after the death of the person who signed it. If the land registry office discovers that a deed has been registered after death — a big if, since it’s not always obvious — it will cancel the registration.

One issue that MacLeod-Beliveau seized on in the Thompson case was the statements of legal age and marital status, which are contained in every Ontario deed. At the time the deceased signed the deed, the statements were accurate. At the time of registration, they were not because the person was deceased.

The judge, along with Jeff Lem, the director of titles, take the position that those statements are wrong if the deed is registered after death. However, the judge in the Winarski case had no problem giving effect to an unregistered deed signed before death.

An online warning by the director of titles advises that lawyers cannot, under any circumstances, register a transfer of land signed by a deceased owner — even if we are “pretty sure that is what the client would have wanted.”

So now we have two decisions by judges of the Superior Court coming to opposite conclusions.

My personal view, despite considerable legal opinion to the contrary, is that zombie deeds are — excuse the expression —  alive and well in the province of Ontario.

They are a valuable estate planning tool which allows Ontarians to avoid the punitive 1.5 per cent estate tax and the court delay of eight-plus months to obtain probate.

Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

 


Your property, and your family, deserve to be protected in your will

In these times of economic uncertainty, Canadians who own their own homes may be thinking about protecting them from health risks due to the COVID-19 pandemic.

For most homeowners, their houses and condominiums are their largest single assets. In the last couple of months, many Ontario lawyers have noticed an increase in inquiries from clients who want to prepare their wills and protect their homes from the provincial government’s 1.5 per cent estate tax. That’s $15,000 on a $1 million house.

Clients typically ask:

  • who they should name as estate trustee to liquidate homes and other assets;
  • how the proceeds can be sheltered so their spouse or children will efficiently receive their share;
  • how title can be registered to avoid probate fees and the eight-plus months it takes for the courts to issue a certificate to the estate trustee, allowing the home to be sold;
  • who will look after the property during the delay.

I recommend everyone with any significant assets, like a house or condominium, preparing their wills.

Common-law spouses with separately-owned assets often do not consider the need for wills. Recently, one of my clients passed away prematurely, and without a will. He was in a long-term relationship with his common-law spouse and, unfortunately under Ontario law, she is not treated as a surviving spouse and may get little or nothing from the sale of the house in which they lived, or his other assets.

New parents — especially those who own or are about to purchase a home — should have wills, even if their debts exceed their current assets. Wills can also establish written instructions for the care of their children, and direct the care of their money and property.

Dealing with real estate, cash, stocks and other assets is problematic if there is no will or a badly drafted one.

Historically, a will must be signed in front of two adult witnesses who are not beneficiaries or spouses of beneficiaries, with all three people present in person at the same time

But under an emergency order passed by the Ontario government, wills can be witnessed in a videoconference if one of the witnesses is a licensed lawyer or paralegal. In this case, three identical documents each bearing one ink signature will, when attached to each other, be treated as one will.

Another option is for a single document to be circulated among the person signing the will and the two witnesses. The three signatures are placed on the same document during three separate videoconferences, with each person watching the other two sign.

While making a will, it’s also a good idea to prepare a power of attorney for property — including real estate and bank accounts — and a power of attorney for personal care. These documents can save considerable grief when a person is unable to make their own decisions.

Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.